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You’ve most likely heard of “the cloud.” In its simplest definition it’s the place where data is stored.

When evaluating any type of point-of-sale system, you have the option to store data in a main computer that’s perhaps linked to several checkout terminals, or you can store data in a main computer off-site hosted and maintained by a third party service. This is called a cloud-based POS system, and they are increasing in popularity.

When most people think about cloud-based point of sale systems, they think of a system that have a virtual web back end for management and reporting. Most of these systems run in IPads or Android tablets. For the sake of this article, this is type of cloud system we will be addressing. Many of these systems have a very low cost barrier to entry. Is it really worth following the trend of moving away from a standard POS system to use a cloud-based one? Although there can be some advantages to the cloud, here’s the truth about making the switch that you may not have considered.

Data Ownership

Your agreement with many cloud point of sale software systems includes verbiage that makes the Point of Sale Company the owner of the data, or at least gives them full rights to your data to sell it to third parties. It is the rule and not the exception among cloud-based point of sale companies to sell your data.

Speed

Many of today’s cloud systems are running on tablets with low memory requiring constant communication with cloud services for continuous operation. In side by side tests performed by many business owners and dealers, traditional on premise systems simply outperform cloud-based systems regarding speed of service, and speed equals money in typical businesses. This makes sense considering that much of the data required to operate these systems is in the cloud and not on location. Also, the consumer grade hardware used for many of these applications is not built for speed in a commercial environment.

Reliability

Because most cloud-based point of sale systems are based on consumer tablets without multiple ports necessary for reliable operation, peripherals like printers, barcode scanners, cash drawers, etc., as well as network communications are typically run on Bluetooth or Wifi. This becomes the Achilles heel of these systems. These wireless technologies simply cannot match the reliability of a traditional wire to keep your business running. After all isn’t running your business what this is all about?

Security

The cloud moves computing workloads off-site and mobilizes data on rented space on a giant server. Most cloud-based POS systems maintain private cloud systems that are typically in several geographic locations. A traditional POS system is housed in a back office where you manage your own in house security and data back up. If you use a cloud-based system you have to depend on others, meaning you have to trust who you are using to make sure they are providing high-end security and back up services.

Internet Connection

Using a standard POS system does not require an internet connection, but using a cloud-based system does. If your internet goes down, chances are your business goes down, and you could be missing out on sales. However, there are some cloud systems that can store some internal memory. This memory can store some transactions until you can get back up online, but who wants to take this chance?

Also, what happens if you have a system that is dependent on communication with other stations in the network? Such is the case in table service restaurants where a table stored on one station may need to be recalled at another. In this case, a simple network outage could take the business down, or at least leave it crawling at a snail’s pace. No one can ever predict how long an outage will be.

Cost-Effectiveness

When you consider the just speed of service and the possible down time risk that comes with a true cloud-based point of sale system, the costs can easily mount up to cost much more than the price of simply operating a standard system.

So if you’re considering moving to a cloud-based POS system make sure you consider security concerns, internet connection, reliability, speed, data ownership, and cost effectiveness. The truth may be that a standard POS system is still the better choice for your business. Many people want a cloud-based system until they get one.